Examination of the challenges in agile projects from the

suppliers perspective in Norway´s software industry

Insight and recommendations

Lubna Siddique

Thesis submitted for the degree of Philosophiae Doctor

Department of Informatics Faculty of Mathematics and Natural Sciences

University of Oslo, Norway

March 2017

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© , 2017

Series of dissertations submitted to the

Faculty of Mathematics and Natural Sciences, University of Oslo

No. 188

ISSN 1501-7710

All rights reserved. No part of this publication may be

reproduced or transmitted, in any form or by any means, without permission.

Cover: Hanne Baadsgaard Utigard.

Print production: Reprosentralen, University of Oslo.

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Abstract

This research aims at structuring understanding related to the core challenges faced by project

managers and software developers while working with agile-based software projects in the

Norwegian software industry. Agile methods are lightweight processes that employ short

iterative cycles, actively involve users to establish, prioritize and verify requirements and rely

on a teams tacit knowledge, as opposed to documentation. Two major results have emerged

from this research: firstly there is a critical need to have more formalized approaches to regulate

the relationship between software developers and customers. Evidence based on qualitative

studies from this research suggests that contract management and ensuring customer

involvement are the most critical challenges for agile-based development, as seen from the

project managers and software developers perspectives. Another emergent result from this

research suggests that embedded mechanisms in agile-based software projects, such as small

iterations, frequent delivery and continuous assessment are a contributing factor in reducing

the scope of the challenges outlined above. These mechanisms contribute, among other things,

toward establishing trust and knowledge sharing which, in turn, enhances customer

involvement and compensates for inadequately formulated contracts.

In this research, I distinguish between two perspectives regarding agile-based software

perspectives: the customers perspective and the project managers or software developers

perspective. The point of departure for this research was to establish an overview of the

challenges from the project managers/software developers perspectives in the Norwegian

software industry. One major result emerged from the first study that suggested that poor

customer involvement and problems related to contracting were among the most significant

challenges that needed to be addressed.

To dig deep into these reported challenges, the subject of the second study was related to

contracting. The second study was conducted in order to shed light on the challenges related to

contract selection and management, as well as its consequences. One important result that

emerged from the second study indicated that these challenges are results of using the standard

software contracts which were designed on the principle of waterfall-based approaches, which

meant precisely that there is unequal sharing of risk. Other challenges that rise due to this

waterfall mindset are that contract selection is based on preferences of the supplier/customer

which, in turn depends on the share of risk rather than the suitability of the methodology. This

is the reason public companies prefer to use fixed-price contracts while suppliers prefer to use

Time and material contracts. This waterfall mindset consequently results in inadequate

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customer involvement. Other problems that the results indicated include: unsatisfied

customers, disputes, unpaid effort, early shutdown of projects, delays and increased costs.

Based on these findings, second study suggests contract management strategies that can help

software practitioners mitigate these challenges. There are certain factors that can help combat

the challenges related to contracting. The second study listed these factors that requires

clarification before writing a contract, and these include: customer vision, business goals, cost

of project, software specification, role of customer and his degree of involvement and steering

required, response times required by own organization, the jargon/language used for reporting

and understanding the status of the project needs also (informal) consideration. Further, making

efforts and following strategies to involve customer could help to address these challenges.

The importance of adequate customer involvement has been identified by practitioners as a key

factor for ensuring a smooth contracting process and successful project development. The

findings of third study suggested a list of enabling factors for customer involvement, including:

understanding the customers perception of success, effective communication, being

forthcoming and accommodating, establishing trust, transparency and openness, having the

product owner understand their role, having a good understanding of the technical and

functional side and persistent cooperation. The findings also present barriers to customer

involvement. One of the barriers is lack of understanding regarding agile methodology on

customers side. If a customer is not aware of the methodology, they will not understand that

it requires them to collaborate closely during the project development process. It would also be

challenging if people working on the project lacked essential skills, because agile project

methods require a team of competent individuals.

A fourth study was conducted to look at the risk management process for agile software

projects. The results of this study show that although agile methods themselves dont provide

any process or mechanism for a risk management process, the embedded mechanisms in agile

methods, i.e. are communication and collaboration, shorter iterations, frequent delivery, early

feedback and delivering complex parts first, helps to implicitly manage risks in agile projects.

A study about success in agile projects showed that frequent deliveries help to evaluate the

project deliverables in a continuous manner, and therefore it helps to have customer get the

working parts of the project. In this situation, a supplier can then get early feedback from the

customer about the quality of the deliverables and missing requirements can be made up in the

next iterations. Thus, frequent delivery and early feedback also help support the risk

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management objectives is shown in this study. The study presents findings that a second way

of managing risk in agile projects is the same as in waterfall projects, and a fourth study defined

the following strategies explicitly as risk management strategies: relative estimates, burn down

chart, SWOT analysis and risk matrix.

Understanding a customers perception of success has been identified as a key driver for

ensuring customer involvement, and findings relating to this are presented in a third study. A

fifth study showed that evaluation of understanding the perception of success happens through

continuous assessment of project outcomes during a projects development. Furthermore, the

assessment is handled jointly by both the supplier and the customer. This embedded mechanism

of continuous and joint assessment creates an atmosphere of close contact with the customer,

along with better knowledge sharing between both parties. This, in turn, builds stronger trust

between the parties, which then facilitates conflict resolution. Sources of conflicts and their

consequences are presented in the first study. Assessing the chances of success at the iteration

level also helps to improve customer involvement and reduction in task uncertainty which, in

turn, increases the predictability of project direction and project outcomes. This might help to

increase control over changes and account for the various stakeholders perceptions of success.

Thus, this study presents its contributions in terms of presentation and an in-depth empirical

study of the challenges that project managers and software developers face while working with

agile software projects. These are related to contracting and ensuring customer involvement

and risk management. The number of practitioners interviewed for this study numbered 56 in

total. All of the practitioners were either from the suppliers side or they were from companies

who had in-house development. The scope of this study is that it was conducted in the

Norwegian software industry. Keeping in mind that with this relatively small number of

informants, this research does not have a strong ground for generalizations; the results provide

an overview of challenges experienced by the project managers and developers.

The method used for this research is Grounded theory. Using Grounded theory for any research

has both advantages and disadvantages. The advantage of usi